FTA MOTOR FUEL UNIFORMITY COMMITTEE Houston, Texas May 4, 2013

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1 FTA MOTOR FUEL UNIFORMITY COMMITTEE Houston, Texas May 4, 2013 Minutes The FTA Motor Fuel Tax Section Uniformity Committee met at the DoubleTree by the Galleria, Houston, Texas. Jeremy Neeck (MN) Uniformity State Chair called the meeting to order. Thirty-seven (37) were in attendance. (See attached list of attendees) Minutes The minutes of the January, 2013 Uniformity Committee meeting in Long Beach, California were approved. Uniformity Chairs State Co-Chair Industry Co-Chair Subcommittee Chairs Compliance Subcommittee State Co-Chair Industry Co-Chair Jeremy Neeck State of Minnesota Bob Donnellan Global Companies LLC Cindy Mongold State of Kansas Rae Taki Shell Oil Communication and Coordination Subcommittee State Co-Chair Christy Dixon State of Oklahoma Industry Co-Chair Anne Nicholson, Exxon Mobil Electronic Commerce Subcommittee State Co-Chair Hal Lovell State of California Industry Co-Chair Gene Holland, ConocoPhillips Forms Management Subcommittee State Co-Chair Lee Gonzalez, State of Florida Industry Co-Chair Scott Louie Chevron Presentation NGV America-ngvamerica.org Jeff Clark, General Council and Director of Regulatory Affairs gave a presentation on What is Driving the Market. Some of the items that were included in the presentation were: Mobile fueling can go to a sight and fill CNG and LNG vehicles. Clean Energy Company is putting 150 LNG stations nationwide. They are putting in LNG fueling station wherever there is a Pilot/Flying J Station. 85 stations have been completed to date. Shell drilling rigs, trucks and ships are using LNG. UPS now has 700 new LNG tractors. Waste Management has 2,000 vehicles running on CNG and they are going to open 20 fueling stations that will be open to the public. At this time, LNG will probably not be for passenger vehicles/trucks.

2 Minutes, Motor Fuel Uniformity Houston, Texas May 4, 2013 Page 2 Subcommittee Reports The Compliance Subcommittee Cindy Mongold (KS) reported there were twenty-six (26) in attendance. The Committee discussed: Training Schedule update FTA is currently working on the scheduling of the Basic Training Class for October A notice will be out when it is finalized.. Dyed Diesel Stats The dyed fuel stats spreadsheet for 2012 and 2011 were provided. The group asked questions and discussed the comparison between the two years. During 2012 there were fewer samples taken and fewer violations; however there was a significant increase in dollars assessed. The category with the most violations continues to be personal vehicles. IRS Update There was no representative from the IRS. Compliance Tools A draft of the compliance tools document were presented. The subcommittee members reviewed and discussed the document. Feedback was recorded so that updates can be made. It was suggested to add a section on Motor Fuel Tracking. The subcommittee will review the updated document at the next meeting in September. New Business the committee continues to solicit project/topic suggestions for the Compliance Subcommittee to work on in 2013 and The following articles were distributed as an example of continual growth in the CNG and LNG market. States should consider current and future taxation of these fuels. Federal Bulletin No 1855 (CNG) The Peugeot Air Powered Hybrid Car BNSF explores liquefied natural gas alternative for locomotives Berkshire s Oil Hauling Railroad Tests Switch to Natural Gas BNSF to test natural gas powered locomotives Honda CNG touted in Wisconsin LNG for YRC in California Love s Loves CNG, eight stops in Texas Ryder NGV s for Shreveport s Eagle UQM extends Proterra Supply Pact (electric bus) Apache CNG for Houston Galleria Carbon Black -- EAF The Forms Management Subcommittee Lee Gonzalez (Florida) reported that this committee met with Electronic Commerce. There were thirty-four (34) in attendance. The subcommittee discussed: Crosswalk (FTA and STCC Codes) the document that provided the crosswalk between FTA and STCC product codes was presented. He crosswalk team asked State and Industry to review the document to identify deleted product codes that were removed in error or to identify missing codes that should have been included. All feedback will be reviewed at the September meeting.

3 Minutes, Motor Fuel Uniformity Houston, Texas May 4, 2013 Page 3 Georgia Forms Review The forms review team reviewed Georgia s Distributor Report for uniformity and found the following need to resolved before the form will be considered uniform: Instructions convert the term debits and credits to receipts and disbursements Instructions identify how products will be segregated between lines 13 and 15 for schedule type 5X. Instructions separate beginning inventory from the category of debits (receipts) and ending inventory from the category of credits (disbursements) Page 3 to 6 change headers information for consistency purposes (Georgia or State of Georgia) Pages 5 and 6 and general instructions eliminate city from point of origin and destination. Pages 5 and 6 correct the spelling of multiple Pages 5 and 6 define B00 in the instructions General Instructions add document number General Instructions remove O (other) as possible mode code General Instructions define you may combine several product codes Mode Codes it was identified problems (invalid mode code, consolidated list of mode codes is not available in the guide, etc) in the Uniformity Guide regarding mode codes. The following suggestions were made: Remove mode GS from Carrier Report. This is not a valid mode of transport. Amend Mode of Transport to Transaction Type Mode Code within form instructions. Add a list of all mode codes with definitions to the Uniformity Guide. The Committee voted to incorporate all three suggestions into the Uniformity Guide. Comparison (Electronic Implementation Guides to Uniformity Guide) the committee is rewriting the implementation guide for electronic fling. The subcommittee identified inconsistencies between the Uniformity Guide and the Electronic Commerce Implementation Guide. The EC Committee recommended the following: Add Uniformity Guide to the title page Add subcommittee contact list to the Uniformity Guide Replace Indian with the word Native American on schedule descriptions (schedule 5R and 10T) Move gasohol ethanol blends (E01-E99) and gasohol methanol blends (M01-M99) under a separate category called gasoline fuel group under FTA product code list Add product code request form to electronic commerce implementation guide Industry Issues Texas still require a point of destination (state) for barge movements of fuel. This is difficult for industry to track. Buy/Sell Agreements referred to Communications Subcommittee Michigan States need know if butane is taxable in their jurisdiction. If taxable, at what point should it be taxed. Texas labeling requirements for bio-diesel. Difficult to adjust rates based on % of biodiesel.

4 Minutes, Motor Fuel Uniformity Houston, Texas May 4, 2013 Page 4 State ExSTARS Update Kansas gave an update on tracking ExSTARS data. (See the minutes of this subcommittee for more details) Approved by the Full Committee o Remove mode GS from Carrier Report. This is not a valid mode of transport. o Amend Mode of Transport to Transaction Type Mode Code within form instructions. o Add a list of all mode codes with definitions to the Uniformity Guide. The Electronic Commerce Subcommittee Hal Lovell (California) reported there were thirteen (13) in attendance. The subcommittee discussed the following: EDI REF Segment Group discussed the fact that the IRS might not need this segment anymore. The committee reviewed a release on the IRS website related to this segment and believe the best solution is to update the segment with a note in the FTA guide that the IRS no longer requires this field to be used as this time. The committee will leave the segment in the guide with this notation. IRS Project to transition to XML still waiting for this project to get started. The IRS is trying to determine with their e-file system if XML might be a better platform for ExSTARS moving forward. The IRS point of contact for this project is Larry Porter. The committee will follow up with the IRS and report at the next meetings in September. Utah s question on the XML schema The committee discussed the State of Utah s request to add a check box to the XML schema to declare the intent of the taxpayer related to a specific line of their tax return. The committee came up with some suggestions, which included revising the trading partner agreement form instead of an XML schema change. The committee asked the Utah representative some questions and asked that they research and bring back to the committee the XML concern with more details on the need related to this request. X12/EDI guide update for the State of North Carolina update The State of North Carolina had some high level questions related to an update that North Carolina is currently undertaking on their guide. E-File Implementation Guide Update The Committee will be continuing our weekly WebEx meetings to complete the update to the guide. The committee went over the current layout of the new guide and the progress that we have made to date. The committees agreed as a group to finish the Guide and are asking for final review by . (See the minutes of this subcommittee for more details)

5 Minutes, Motor Fuel Uniformity Houston, Texas May 4, 2013 Page 5 The Communication and Coordination Subcommittee Christy Dixon (OK) reported that twenty-five (25) were in attendance. The subcommittee discussed the following and the May 2013 Uniformer was distributed Taxation, Diversion and Alternative Fuels Booklet The committee discussed the Taxation, Diversion and Alternative Fuels Booklet that is to be updated for 2013 FTA Motor Fuel Annual Meeting. The subcommittee discussed and approved the new Section 11 to be added to the booklet. Section 11-Taxability & Conversion Rates for Compressed Natural Gas (CNG), E85, Electric Vehicles/Electricity, Gasoline Hybrid Vehicles, Hydrogen, Liquefied Natural Gas (LNG), Liquefied Petroleum Gas (LPG), Methanol or M85 and other Fuel Type Taxability Conversion Rate if applicable CNG (Compressed Natural Gas) E85 Not Applicable Electric Vehicles/Electricity Gasoline Hybrid Vehicles Hydrogen LNG (Liquefied Natural Gas) LPG (Liquefied Petroleum Gas) Methanol or M85 Other Not Applicable Not Applicable Not Applicable Not Applicable Native American Booklet The Native American Booklet will be updated for the 2013 FTA Motor Fuel Annual Meeting. Buy/Sell Agreements and Flash Title Agreements the following question was sent out on the listserv: For Rack States, how do you tax or handle buy/sell (flash title) agreements? This fuel is being exported by someone other than the supplier/position holder. If you would expect destination state tax to be charged (collected), what documentation would be required in order for the cross matching? After a very lengthy discussion, the subcommittee agreed upon the following: Another question will be put out on the Motor Fuel Listserv with the four scenarios that were provided.

6 Minutes, Motor Fuel Uniformity Houston, Texas May 4, 2013 Page 6 A committee will look at each States statutes to see what states have definitions for buy/sell agreements and flash title agreements and compile them and submit it to the working group before the next meeting. The working group will continue to work on a section for the Model Legislation, definitions, etc based on the responses from the listserv and the compiled information that is submitted to them concerning definitions. The committee will get copies of different bill of ladings and provide them to working group before the next meeting. Alternative Fuels Section of Model Legislation the revisions to be made to the current Alternative Section of the Model Legislation is currently being worked on. This will be discussed at our next meeting in September. White Paper Document on Motor Fuel Tax Issues with Natural Gas and Other Alternative Fuels 2009 the subcommittee discussed the revised document and a few more revisions need to be made. White Paper Document on Inventory Gains and Losses this was tabled until the September meeting. (See the minutes of this subcommittee for more details) Canadian Update Rick Calloway reported that they are looking at the Fuel Tax Council Mission Statement for any edit, revisions. The Canadian project is changing from Semi Annual meetings to an Annual meeting. The following is what the Council is currently working on: Clearing House where information can be shared Uniform Reporting Best Practice Model for licensing, registration etc Alternative Fuels Natural Gas, etc Web based training New Business The printing the Uniformity Guide and Alternative Fuels booklet was discussed. The Steering Committee is looking for a panel for the Question and Answer Breakout for the Annual Motor Fuel meeting in September. Next Meeting The next Uniformity Committee meeting is scheduled for September 20 and 21 in Fargo, North Dakota. The meeting was adjourned.

7 FTA UNIFORMITY COMMITTEE Houston, Texas 4-May-13 Present? State/Company Phone Address Albin, Michael ACS Government Solutions XX Alderman, Donna North Carolina Dept of Revenue XX Anders-Robb, Cindy Federation of Tax Administrators (FTA) Arndt, Doug ND Tax Commission Autry, Beth Musket Corp/Love's Truck Stop Baldwin, Sarah Husky Marketing & Supply Company XX Banting, Nicholas PA Department of Revenue Benton, Linda Kentucky Dept of Revenue Bianchi, Donald PA Department of Revenue Bickle, Michelle Shell Oil Company Bock, Maureen OR Dept of Transportation Bonaccorso, Shirley Louisiana Dept of Revenue Bowers, Kristin Musket Corp/Love's Truck Stop XX Boyete, Glenn Mississippi Department of Revenue Branch, Melanie Shell Bryer, Scott New Hampshire Dept of Safety Bullock, Traci SC Department of Revenue Bujno, David NH Department of Safety Burdick, Doug Fuel Quest/ZyTax XX Callaway, Rick Canadian Fuel Tax Council Page 1

8 FTA UNIFORMITY COMMITTEE Houston, Texas 4-May-13 Present? State/Company Phone Address Cano, Martin Texas Comptroller of Public Accounts Cheung, Tella Shell Oil Products Compton, Deborah Exxon Mobil Corporation Davenport, Kirk Texas Comptroller of Public Accounts Dearie, Erin E International-Matex Tank Terminals erindearie@imlt.com XX Dixon, Christy Oklahoma Tax Commission cdixon@oktax.state.ok.us XX Donnellan, Robert Global Companies LLC rdonnellan@globalp.com Dougherty, Michael FHwA michael.dougherty@dot.gov Drewry, Amy Louis Dreyfus Commodities amy.drewry@ldcom.com Dudek, Sabrina NuStar Energy LP sabrina.dudek@nustarenergy.com Engelken, David Tank Management Service Inc david@tankmagmt.com Farish, Dan Murphy Oil USA Inc dan_farish@murphyoilcorp.com XX Feletto, Lou CA Board of Equilization lou.feletto@boe.ca.gov Fitzgerald, Julian Sr. North Carolina Dept of Revenue julian.fitzgerald@dornc.com Fitzgerald, Scott Iowa Department of Revenue scott.fitzgerald@iowa.gov Friedman, Vickie CSX Transportation vickie_friedman@csx.com Garza, Oscar Oscar L. Garza & Associates olgarza@olgarza.com Gast, Keith MO Dept of Revenue keith_gast@mail.dor.state.mo.us XX Gilson, Cheryl FuelQuest cheryl.gilson@fuelquest.com Glaser, Kim PA Department of Revenue kglaser@pa.gov Page 2

9 FTA UNIFORMITY COMMITTEE Houston, Texas 4-May-13 Present? State/Company Phone Address Golden, Heather Shell Oil Company Gonzalez, Augustine Innovative Software Solutions XX Gonzalez, Lee Florida Department of Revenue Grammer, Michael Kentucky Dept of Revenue XX Gray, Bill Sinclair Oil Corporation Grigsby, Ray Tennessee Dept of Revenue Grizzle, Jonna Shell Hales, Frank Utah State Tax Commission Halubka, Tracy MT Dept of Transportation Hapa, Joselito Shell Oil Company Joselito.hapa.shell.com XX Hennig, Drew FuelQuest XX Hernandez, David Valero Energy XX Hicks, Arlanda Deloitte Tax LLP Hook, Stan Wisconsin DOR XX Holland, Gene ConocoPhillips Humphrey, Nick Missouri Dept of Revenue Humphries, Stephen Exxon Mobil Corporation Ice, Wilda West Virginia Dept of Tax & Revenue Johnson, Bruce WV State Tax Dept Johnson, Paul WA Dept of Licensing Page 3

10 FTA UNIFORMITY COMMITTEE Houston, Texas 4-May-13 Present? State/Company Phone Address XX Jones,Julie Utah State Tax Commission Keel, June Colonial Oil Industries Kirkpatrick, Phillip Exxon Mobil Corporation Knoles, Trent Illinois Dept of Revenue Kron, bill Mississippi Department of Revenue Lagunas, Manuel AZ DOT Legaspi-Seils, Melody Alliance Energy LLC Leichner, Marcia Nebraska Department of Revenue Lenius, Tracy Minnesota Department of Revenue Levasseur, Marc Rhode Island Division of Taxation XX Lietz, Dawn Nevada Dept of Motor Vehicles Ligotino, Cecilia Shell Oil Products XX Little, Richard Deloitte Tax LLP XX Louie, Scott Chevron Corporation XX Lovell, Hal California Board of Equalization Lupisan, Christopher Joseph Shell Oil Company Lyon, Jonathan FTA McClain, Shanda Louisiana Dept of Revenue McInerney, Bill WY Dept of Audit McInerney, Jessica Cargill Incorporated Page 4

11 FTA UNIFORMITY COMMITTEE Houston, Texas 4-May-13 Present? State/Company Phone Address XX Martin, Edie Kansas Department of Revenue Martin, Wally Exxon Mobil Corporation Martinez, Pitter A Gavilon, LLC pitter.martinez@gavilon.com Mattson-Grimm, Ray Xerox Government Solutions ray.mattson-grimm@xerox.com Milledge, Nick Gavilon, LLC nick.milledge@gavilon.com Miller, Ron R & L Consulting rwinfield46@yahoo.com Molique, Laura Exxon Mobil Corporation laura.l.molique@exxonmobil.com Monconduit, Michel IRS michel.monconduit@irs.gov XX Mongold, Cindy Kansas Department of Revenue cindy.mongold@kdor.ks.gov XX Neeck, Jeremy Minnesota Department of Revenue `030 jeremy.neeck@state.mn.us XX Newton, Bill Utah State Tax Commission bnewton@utah.gov XX Nicholson, Anne Exxon Mobil Corporation anne.w.nicholson@exxonmobil.com Nutter, Stephen Virginia Dept of Motor Vehicles stephen.nutter@dmv.virginia.gov XX Oliver, Jim Kentucky Dept of Revenue jim.oliver@ky.gov Padon, Jodi Plains Marketing L.P jmpadon@paalp.com Papandrea, Marc CT Dept of Revenue marc.papandrea@po.state.ct.us Player, Carol South Carolina Dept of Revenue playerc@sctax.org Poeppelman, Jodi Husky Marketing & Supply Company jodi.poeppelman@huskyenergy.com Reed, David TX Comptroller of Public Accts david.reed@cpa.state.tx.us Reinauer, Dean Reinauer Transportation x 410 deanr@reinauer.com Page 5

12 FTA UNIFORMITY COMMITTEE Houston, Texas 4-May-13 Present? State/Company Phone Address Retz, David Chevron Corporation Rhoads, Ray Kansas Department of Revenue Rhoads, Wayne Mississippi Dept of Transportation XX Roy, Chris Wisconsin DOR Rutherford III, Henry Georgia Dept of Revenue XX Scheele, Ashley Deloitte Tax LLP XX Schrock, Richard Marathon Petroleum Stein, Winston BSWA Steffens, Peter Florida Department of Revenue XX Takai, Rae Shell Oil Products Templin, Sharon Shell Oil Company Thomas, Gerald ARCO Turner, Ashley CSX Transportation Ulm,Chuck Comptroller of Maryland Warren, Doreen Idaho State Tax Commission Werner, Carol AZ DOT West, Tammy Virginia Dept of Motor Vehicles XX Whaley, Stan Florida Department of Revenue XX Wisyanski, Stephen PA Department of Revenue Zimmerman, Mark AZ DOT Page 6

13 MAY 2013 Volume 44 The Uniformer MESSAGE FROM THE NATIONAL CHAIR EDIE MARTIN Hello Everyone! Are you as ready for summer as I am? While Kansas had only 2 major snow storms this winter, I can t say I ll miss the white stuff, but we could still use the moisture in the Midwest! As National Chair, I am looking forward to attending the Regional meetings this year. It will be interesting to meet new people, see the similarities and differences of each meeting, as well as to gain a better understanding of regional goals. For some States, Legislative sessions are coming to a close. Methods to fund highways continue to be an issue, as well as deflated budgets, revenue decline and lack of grant funding. The use of natural gas is on the rise, which is also creating challenges. We hear more each day that truck fleets are converting to natural gas. Recently, I saw a news article indicating that testing of natural gas in locomotives was in process. These challenges remind me of the importance of partnering with stakeholders to accomplish needed goals. A collaborative effort is required. It s comforting to know that the FTA Motor Fuel Uniformity Committee will continue to tackle state and industry issues, follow trends, as well as opportunities for change and new ideas that could benefit all. However, your participation in Uniformity is still needed! If you cannot attend the meetings in person, conference calling is available. Get involved! The annual meeting in Fargo, North Dakota will be here before we know it! If you are interested in serving on the Time and Place, or Resolutions Committee, or you have discussion topics or projects for the group, please let me know. My contact information is as follows: edie.martin@kdor.ks.us or (785) MESSAGE FROM THE UNIFORMITY COMMITTEE STATE CO-CHAIR JEREMY NEECK Greetings and Happy Spring! As we continue to move forward in 2013, I look forward to working with both states and industry on uniformity and issues that we face either with transportation funding, efficient methods of reporting and collecting taxes, and legislation that deals with the motor fuel industry. In Minnesota, we are in a legislative session that is looking at raising the motor fuel excise tax, increasing surcharges on fuel to pay for increased transportation spending and bonding, and trying to find more effective ways to identify and fairly tax those using alternative fuels as motor fuels. I am sure other states are also exploring this and many other issues that deal with the fact that consumption is decreasing and with more fuel efficient vehicles revenue to fund transportation project is also at a reduced rate. This also leads to another issue that states and industries are faced with, what is the importance of FTA Motor Fuel Tax Section and should we continue to spend money to send representatives to our uniformity meetings and annual meetings? My response is whole-heartedly YES! I have found the value of attending these meetings to be beyond a measureable amount. The relationships that are created not only between states, but to have contacts with industry and the ability to pick up the phone or someone directly to work out issues or solve problems is a value that is not always recognized. Every meeting or conference I attend I learn so much and feel energized when I go back to my state and work on projects or issues that I learn about while attending. FTA Motor Fuel Tax Section has had great success and because of this success and all the great leadership we have received from not only Cindy Anders-Robb but also all the past and present Chairpersons and committee members our model is going to be used to create similar uniformity groups for other tax types within FTA. So I want to say Thank You! to everyone for being so passionate and working so hard for the success of our section. MESSAGE FROM THE UNIFORMITY COMMITTEE INDUSTRY CO-CHAIR BOB DONNELLAN Over the past several years when suggestions are made to the

14 MAY The Uniformer committee we get statements thrown out to us that "we cannot tell states what to do", or "that requires legislative changes." I thought as a group we are supposed to make recommendations as to what is best for uniformity. If we achieve that and a State adopts our recommendations then we have completed a goal of Uniformity. If a State chooses not to adopt a recommendation then that is fine as well. As a group I think we cannot lose sight of what we are trying to accomplish. That goal should be complete Uniformity across the board. When suggestions are made they should be explored and determined if they are within our Uniformity Scope. Everyone in the industry knows that certain changes will require legislation that should not stop us from making a recommendation. MESSAGE FROM CANADIAN FUEL TAX COUNCIL (FTC) RICK CALLAWAY As an organization, the FTC is at a time of change. Change in participation and in the direction taken. Changes are, to a large degree, necessary so that we are better able to meet our objectives and the evolving needs of FTC s membership. As has happened before, we leverage on the successes, work and operations of the FTA. Cindy offers insights into the FTA along with her knowledge and experience with the FTC as we make improvements. The next FTC meetings will be held in Fredericton, New Brunswick on May 14 & 15. These will be the first of our annual meetings with a simplified structure and enhanced reporting. Key agenda items for these meetings will include: Improving the exchange of information with Canadian border services, Providing an update on the implementation of the Systems Information Binder, Developing a uniform approach to reporting transactional details required for areas such as imports, dispositions and tax exemptions, Upgrading and maintaining FTC s website, Discussing the development of best practices for administering fuel taxes on CNG, LNG and LPG, Implementing new training methods including via the web, Updating FTC s priorities and plans, Introducing a new operating and performance management model, and Completing a review of the Generic Fuel Tax Return and Schedules. If you have any questions or need more information, please feel free to contact me at rick.callaway@fueltaxcouncil.com or call (403) UNIFORMITY COMMITTEE Minutes The FTA Motor Fuel Tax Section Uniformity Committee met at the Hilton Long Beach, California January 26, Jeremy Neeck (MN) Uniformity State Chair called the meeting to order. Thirty-seven (37) were in attendance. Minutes The minutes of the October 2012 Uniformity Committee in Providence, RI were correct to add that the committee watched the training video Mr. Mob by Peter Steffens. Presentations: Bob Behrens, Smiths Detection Company and Ted and Debbie, Pacific Laboratories demonstrated equipment that can detect liquids and other products. Ted presented, Pass- Acoustic Technology (Ricky Ray Gun) that can detect what is in a container. It cannot identify liquids in a double walled container at this time. Discussion about the Ricky Ray Gun included the fact that all fuel transport trucks are required to be doubled walled.

15 MAY The Uniformer SUBCOMMITTE REPORTS The Compliance Subcommittee Cindy Mongold (KS) reported there were thirty (30) in attendance. The Committee discussed: Training Schedule for 2012 No training schedule at this time for Schedule is currently being worked on.. Dyed Diesel Stats A report was given on the dyed fuel stats spreadsheet for 2012 with the 4 th quarter information updated. It appears that more states are getting involved with dyed fuel inspection programs. Everyone agrees that even if the % of violation is small, just the presents of continued inspections encourages compliance. IRS Update There was no representative from the IRS, however, there was a discussion regarding the Biodiesel credit of $1.00 and the alternative fuels credit returning, which was retroactive. Compliance Tools Categories for the White Paper document regarding compliance tools was presented and input was requested. It was suggested to add ExSTARS. Audit Terminal Manifest Matching Diversion Review Import/Export information Exchange Between States Dyed Fuel Inspections Publicity of Prosecuted Fuel Tax Cases New Projects for 2013 the committee is looking for new projects to work on. If you have any project you would like to see, please contact Cindy Mongold at cindy.mongold@kdor.ks.gov Open Discussion Several articles were handed out regarding CNG & LNG and the present & future use of these fuels by commercial fleets. Also provided the article The New Way to Tax: Pay Per Mile Driven regarding the state of Washington charging a tax of $100 per year on electric cars and VMT (Vehicle Miles Traveled) 87/ Scenario discussed: A non-registered exporter (nonregistered in State A) buys fuel destined for a rack tax state from a rack tax state. The supplier of record is a permissive supplier for State B (according to State B s laws, a permissive supplier must collect tax on all loads with State B as the destination state). State A requires the supplier to collect State A tax from the nonregistered exporter. State B holds the permissive supplier liable for the tax on the loads destined for State B. Does the permissive supplier have any recourse with regard to the taxes imposed by State A? Should the supplier collect both taxes from the non-registered exporter? It was decided that this issue be combined with the Buy/Sell & Flash Title issue from the Communication and Coordination sub-committee is researching. The Forms Management Subcommittee Lee Gonzalez (Florida) reported that this committee met with Electronic Commerce. There were thirty-seven (37) in attendance. The subcommittee discussed: Crosswalk (FTA and STCC Codes) team did not have significant progress to report since the October 2012 meeting. Uniform Alternative Fuels Tax Report the alternative fuel tax report team presented another draft of a Uniform Alternative Fuel Form, which included a summary schedule to address exempt sales by product types. EC Survey Results The survey results were discussed and a few new ideas for next years survey were: Piggy back IRS factors Piggy back IFTA recommendations on alternative fuel conversions and rates Recognize each state is different and legislation dictates conversion factors A decision was made to refer alternative fuel conversions to the Communication/Coordination subcommittee to look at putting something in the Model Legislation concerning conversion factors. EIA Code Presentation a presentation on converting FTA to EIA codes. The presentation was based on meetings between

16 MAY The Uniformer state, IRS, EIA and industry representatives. The presentation included problems with converting FTA to EIA codes and issues that must be resolved before FTA can move forward with this project. Examples of problems included in the presentation include: Problems with FTA codes Focuses on below the rack transactions Definitions of product codes are too broad FTA product codes are incomplete FTA codes are ambiguous and obsolete Problems with EIA codes Product code defines the use of the product and not the composition of the product Definitions of product codes are too specific (example 39 different grades of gasoline) EIA codes are incomplete New product codes are updated every three years Examples of issues that must be addressed include: Common definitions for product codes (FTA/EIA) Plain language definitions Formal process to request new product codes Once the presentation was completed, the representative from EIA expanded on EIA s role in this project. There were also additional pros and cons of creating a uniform list of codes. The Committee discussed direction of the project. The group proposed three solutions: 1. Create uniform list 2. Create a cross walk between FTA, EIA and IRS codes 3. Table discussion and offer to participate in subsequent meetings between the EIA, IRS and FTA The Committee decided the benefits of options 1 and 2 did not equal or exceed the cost of implementing the solution. Group decided to table the issue, however, FTA will reach out to the IRS and offer team members to participate in future meetings. Industry Issues the industry presented three problems they are having with taxing jurisdictions: 1. States requires supplier to calculate tax due based on the point of destination for all movements of fuel by barge. Destination is difficult to determine due to change in ownership. 2. Industry needs uniformity by state for buy/sell agreements where product is exported. 3. State requires supplier to calculate a tax rate based on the presence of biodiesel fuel in blend. Supplier prefers legislation that would eliminate exemption and tax 100% of blend. States ExSTARS Update ExSTARS update for information filed in Kansas and Mississippi. In summary, the majority of the returns are still being filed in an 826 designation. The Electronic Commerce Subcommittee Hal Lovell (California) reported there were twelve (12) in attendance. The subcommittee discussed the following: EDI REF Segment Group discussed the fact that the IRS might not need this segment anymore. The Committee reviewed a release on the IRS website related to this segment and believe the best solution is to update the segment with a note in the FTA guide that the IRS no longer requires this field to be used at this time. FTA will leave the segment in the guide with this notation. IRS Project to transition to XML No action has been made by the IRS since the last meeting in October. The committee will follow-up with the IRS to see how this project is going. Postal Code List Mexico import transactions in XML Schema The committee will update the E- File guide later this year. Alternative Fuel Tax Report The Committee will need to make sure that the XML and EDI format can support the return structure in the alternative fuel return. There was some concern about other units of measure not being supported in the maps for this return. The group will look at this in more detail at the next meeting. E-File Implementation Guide Update The Committee will be setting up weekly meeting every Tuesday starting on February 25

17 MAY The Uniformer at 4pm(est) to continue to rewrite the E-file guide. The group is also going to recommend that the 2005 IRS guide get updated on the FTA yearly release cycle. The Communication and Coordination Subcommittee Christy Dixon (OK) reported that twenty-three (23) were in attendance. The subcommittee discussed the following and the January 2013 Uniformer was distributed Taxation, Diversion and Alternative Fuels Booklet The committee discussed they wanted to add tax rates, conversion rates, etc for Compressed Natural Gas, Liquefied Natural Gas, Propane, etc and add the Canadians to the booklet. The Committee looked as copies of the questions that have been asked on the Motor Fuel Listserv and decided that all the questions should be incorporated into the booklet. A draft of additional items to be added to the booklet will be discussed at the next uniformity meeting in May before the booklet is sent to each state to be updated. The name of the booklet will also be changed. Native American Booklet The 2011 Native American Survey needs to be updated and printed for the 2013 FTA Motor Fuel Annual Meeting in September. Someone from each region will contact the states within their region and get any changes or updates to the survey. The survey will be sent out to the states for revisions/update in April. Buy/Sell Agreements and Flash Title Agreements The committee had a very lengthy discussion concerning buy/sell agreements and flash title agreements. A working group will work to put together some type of language for Model Legislation and will also relook at the definition that was previously approved for buy/sell agreement. The group will check with API for their input also. Alternative Fuels Section of Model Legislation the revisions to be made to the current Alternative Section of the Model Legislation is currently being worked on. This will be discussed at our next meeting in May. White Paper Document on Inventory Gains and Losses This is currently being worked on and will be discussed at our next meeting in May. Canadian Update Rick Calloway reported that they are continuing to change the project structure. The Council is looking at CNG, LPG and LNG and are doing studies such as: Background paper Risk analysis-equity of the products lost revenue Uniform model of best practices Registration, enforcement, point of taxation The Canadian project currently has three training classes, however they are seeing a decline in attendance. They are going to take the three manuals and break them down to smaller manuals. By breaking them down into smaller manuals they are going to implement an on line training with the manuals. The Canadian project website is currently being updated. New Business EC Survey working group will look at what changes need to be made to the survey concerning the states points of taxation and will be discussed at the next meeting in May. The Steering Committee is looking for topics for the Annual Motor Fuel meeting in September. If you have anything you wish to see on the agenda please contact Cindy Anders- Robb at cindy.andersrobb@taxadmin.org. Next Meeting The next Uniformity Committee meeting is scheduled for May 3-4, 2013 in Houston, TX. FTA Motor Fuel Tax Training Courses The FTA Classes are currently being scheduled. Check FTA s website for more information UPCOMING MEETINGS 2013 Northeastern Region May 19-21, 2013 Burlington, Vermont Southern Region June 16-18, 2013 Little Rock, Arkansas

18 MAY The Uniformer Uniformity Meeting September 20-21, 2013 Fargo, North Dakota Motor Fuel Annual Meeting September 22-25, 2013 Fargo, North Dakota MOTOR FUEL STEERING COMMITTEE MEMBERS National Chair Edie Martin, Kansas National Vice Chair Jim Oliver, Kentucky Past Chairs Dawn Lietz, Nevada Rosemary Cleary, Connecticut State Uniformity Chair Jeremy Neeck, Minnesota Industry Uniformity Chair Robert Donnellan MOTOR FUEL REGIONAL GOVERNORS Midwestern Region Wesley Luthy, Ohio Northeastern Region Chuck Ulm, Maryland Pacific Region Tracy Halubka, Montana Southern Region Rodney Richards, Arkansas Editor Cindy Anders-Robb, FTA (307) cindy.anders-robb@taxadmin.org

19 COMMUNICATION & COORDINATION SUBCOMMITTEE TENTATIVE AGENDA FRIDAY, SEPTEMBER 20, 2013 FARGO, NORTH DAKOTA 1. WELCOME 2. APPROVAL OF MINUTES FROM THE MAY 3, 2013 MEETING. 3. DISTRIBUTE THE LATEST EDITION OF THE UNIFORMER CINDY ANDERS-ROBB, FEDERATION OF TAX ADMINISTRATORS 4. TAXATION, DIVERSION, ALTERNATIVE FUELS BOOKLET-THE 2013 TAXATION. DIVERSION, ALTERNATIVE FUELS BOOKLET IS NOW AVAILABLE 5. DISCUSS DRAFT OF DEFINITIONS, MODEL LEGISLATION, ETC FOR BUY/SELL AGREEMENTS (FLASH TITLE) AND RENEWABLE FUELS ALONG WITH DIAGRAMS-ANNE NICHOLSON-EXXONMOBIL. 6. DISCUSS THE REVISIONS TO THE WHITE PAPER DOCUMENT MOTOR FUEL TAX ISSUES WITH NATURAL GAS AND OTHER ALTERNATIVE FUELS CINDY MONGOLD, KANSAS 7. DISCUSS THE REVISIONS THAT NEED TO BE MADE TO THE ALTERNATIVE SECTION OF THE MODEL LEGISLATION. WILDA ICE, WEST VIRGINIA AND CINDY MONGOLD, KANSAS 8. DISCUSS THE WHITE PAPER DOCUMENT TO BE COMPLETED FOR INVENTORY GAINS AND LOSSES. WILDA ICE, WEST VIRGINIA 9. THE 2013 NATIVE AMERICAN SURVEY IS NOW AVAILABLE. 10. OLD BUSINESS 11. NEW BUSINESS 12. NEXT MEETING : TO BE ANNOUNCED

20 FTA MOTOR FUEL UNIFORMITY COMMITTEE COMMUNICATION & COORDINATION SUBCOMMITTEE HOUSTON, TEXAS MAY 3, 2013 MINUTES The Communication & Coordination Subcommittee met on Friday, May 3, State Co-Chair Christy Dixon and Industry Co-Chair, Anne Nicholson conducted the meeting. The meeting was called to order at approximately 1:00 PM. There were 25 attendees present. The minutes from the January 25, 2013 meeting were approved with the following corrections to the misspelled names listed on the Working Group for the Buy/Sell Agreements and Flash Title Agreements: Scott Louis to Scott Louie Bob Donnelan to Bob Donnellan Pitter Martinez, Gavelon, LLC to Pitter Martinez, Gavilon, LLC The latest edition of the Uniformer (May, 2013 copy) was distributed. General The subcommittee discussed The Taxation, Diversion and Alternative Fuels Booklet that is to be updated for 2013 FTA Motor Fuel Annual Meeting. The subcommittee discussed the draft of the new Section 11 to be added to the booklet. The subcommittee approved the following Section 11 to be added to the booklet for 2013: Section 11-Taxability & Conversion Rates for Compressed Natural Gas (CNG), E85, Electric Vehicles/Electricity, Gasoline Hybrid Vehicles, Hydrogen, Liquefied Natural Gas (LNG), Liquefied Petroleum Gas (LPG), Methanol or M85, and other Fuel Type Taxability Conversion Rate if applicable CNG (Compressed Natural Gas) E85 Not Applicable Electric Vehicles/Electricity Gasoline Hybrid Vehicles Hydrogen LNG (Liquefied Natural Gas) Not Applicable Not Applicable

21 LPG (Liquefied Petroleum Gas) Methanol or M85 Other Not Applicable Not Applicable This new section 11 will be added to each states survey. Again someone from each region will contact the states within their region and get any updates/revisions to the survey. The following people from each region will contact the states within their regions: Midwest-Edie Martin-State of Kansas Northeast-To be determined Pacific-Dawn Lietz-State of Arizona Southern-Lee Gonzalez-State of Florida The surveys will be sent out to each regional contact in June, There were no current definitions discussed at the meeting for any revisions. Buy/Sell Agreements and Flash Title Agreements. An was sent out to all of the Rack States stating that if they were unable to attend this meeting, please try to call in at 1:30 to join in on the discussion. At 1:30 the following people called in and joined in on our discussion: Phillip Kirkpatrick ExxonMobil Joe Ross Phillips 66 Bob Johnson Phillips 66 Vicki Phillips 66 Sharlene Peterson Sinclair Oil Bonita Calhoun State of Alabama Randy Winkler State of Alabama Ray Grigsby State of Tennessee David Reed State of Texas Tammy West State of Virginia Between this meeting and the January, 2013 meeting, the following questions were put on the Motor Fuel Listserv: For rack states, how do you tax or handle Buy/Sell (flash title) agreements? This fuel is being exported by someone other than the supplier/position holder. Example: Company A sells to Company B, then Company B sells to Company C, Company C exports to another state (note: Company C physically picks up the product at the rack). For your

22 State, what taxes would you expect to see? If you would expect destination state tax to be charged (collected), what documentation would be required in order for the cross matching?. Received nine (9) responses from the states and industry from the listserv questions. Bob Donnellan lead the discussion. He tried to explain how industry has changed the way they do business and the states need to look at their current statutes to see if they can make an administrative ruling or if a legislation change will need to be done in order to accommodate the way industry has changed their practices of doing business. Rich Little and Ashley Scheele, Deloitte Tax. put together four scenarios concerning Buy/Sell Agreement and Flash Title Issues. They also provided definitions for Buy/Sell Agreement, Flash Title and Ultimate Exporter. The working group also provided a draft document for the Model Legislation Section of the Uniformity Book which included definitions for Buy/Sell Agreement and Flash Title. After a very lengthy discussion, the subcommittee agreed upon the following: 1. Another question will be put out on the Motor Fuel Listserv with the four scenarios that were provided by Rich Little and Ashley Scheele 2. Rich Little and Ashley Scheele are going to look at each states statutes to see what states have definitions for Buy/Sell Agreements and Flash Title Agreements and compile them and submit it to the working group before the next meeting. 3. The working group will continue to work on a section for Model Legislation, definitions, etc based on the responses from the listserv and the compiled information that is submitted to them concerning definitions. 4. Bill Gray, Sinclair Oil will also get copies of different Bill of Ladings and provided them to working group before the next meeting. The working group will provide drafts of definitions and model legislation at our next meeting in September, The following is a revised list of the working group for this project: Scott Louie, Chevron Carol Player, South Carolina Ann Nicholson, ExxonMobil Bob Donnellan, Global Companies, LLC Ashley Scheele, Deloitte Tax Rich Little, Deloitte Tax Bill Gray, Sinclair Oil

23 A draft of revisions/updates for the current White Paper document Motor Fuel Tax Issues with Natural Gas and Other Alternative Fuels 2009 was presented. The subcommittee discussed the revised document and a few more revisions need to be made and the subcommittee will look at these revision at our next meeting in September, The White Paper Document concerning Inventory Gains and Losses that is being worked on by Wilda Ice-State of West Virginia was tabled and will be discussed at our next meeting in September, The revisions to be made to the current Alternative Section of the Model Legislation is currently being worked on by Cindy Mongold-State of Kansas and Wilda Ice-State of West Virginia has been tabled at this time. The 2011 Native American Survey were sent out to the following regional contacts on April 30, 2013 to be sent out for updates, edits, revisions, etc so that the survey can be updated and the 2013 Native American Survey can be available at the FTA 2013 Motor Fuels Tax Section Annual Meeting: Midwest-Marcia Leichner-State of Nebraska Northeast-Scott Bryer, State of New Hampshire Pacific-Lou Feletto-State of California Southern-Lee Gonzalez-State of Florida The next meeting will be on Friday, September 20, 2013, Fargo, North Dakota. Christy Dixon, State Co-Chair, State of Oklahoma Anne Nicholson, Industry Co-Chair, ExxonMobil

24 COMPLIANCE SUB- COMMITTEE AGENDA May 3, 2013 Houston, TX 1. Welcome 2. Approval of Minutes from January 2013 meeting 3. Training Schedule Update 4. Dyed Fuel Stats: Jeremy Neeck 5. IRS Update: 6. Old Business: a. Compliance Tools document Wilda Ice, Cindy Mongold & Edie Martin b. Pass out articles i. Bulletin No (CNG) ii. The Peugeot Air Powered Hybrid Car Could Hit Streets By 2012 (Provided by Ray Mattson- Grimm) iii. BNSF explores liquefied natural gas alternative for locomotives (Star- telegram.com) iv. Berkshire s Oil Hauling Railroad Tests Switch to Natural Gas (cnbc.com) v. BNSF to test natural- gas- powered locomotives (Journalstar.com) vi. Honda CNG Touted in Wisconsin (Fleetsandfuels.com) vii. LNG for YRC in California (Fleetsandfuels.com) viii. Love s Loves CNG: Eight Stops in Texas (Fleetsandfuels.com) ix. Ryder NGV s for Shreveport s Eagle (Fleetsandfuels.com) x. UQM Extends Proterra Supply Pact (All electric bus) (Fleetsandfuels.com) 7. New Business: a. New projects to work on for 2013 b. Open discussion 8. Next Meeting - Fargo, North Dakota September 20 & 21, 2013